Buffett Warns of Stock Market Reality Check as S&P 500 Shiller CAPE Stays Above 40
Updated
Updated · Yahoo Finance · Oct 10
Buffett Warns of Stock Market Reality Check as S&P 500 Shiller CAPE Stays Above 40
3 articles · Updated · Yahoo Finance · Oct 10
Summary
Buffett said a market “reality check” is looming, arguing investors are in an unprecedented “gambling mood” as stocks rise on momentum rather than business value.
The warning comes with the S&P 500 up about 19% and the Nasdaq up 26% in six months, both hitting record highs this week despite price gains outpacing earnings.
One valuation gauge underscores his concern: the S&P 500 Shiller CAPE has stayed above 40 since May 2026, versus a long-term average near 17 and a late-1999 peak of 44.
Buffett contrasted long-term investing with a market acting like a casino, saying many assets could soon look “very silly” even if he is not calling investing itself terrible.
Berkshire Hathaway has reinforced that caution by holding cash, while the dot-com bust remains the closest parallel for how richly priced, weakly grounded stocks can unravel.